Download Global Inequality and Poverty

Global Inequality
and Poverty
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GLOBALIZATION
A lot of questions and debates
3 basic meanings:
1. Development of a global market economy, in
which goods, capitals, services move freely, driven
by the profit motive
2. Development of the global civil society
3. The growth of international organizations
All three imply the extraordinary growth of
interconnections between societies, economies,
people across state borders
All three imply challenges to the sovereignty of the
nation-state, its ability to act
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Robbie Robertson*:
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Globalization started 500 years ago, an essential feature of
the development of capitalism
3 waves:
Since 1500s – Geographic discoveries, growth of
international trade
Ended at the end of the 18th century
Since 1800s – Industrialization, British hegemony
Ended with the start of World War I
Since 1945 – Institutionalization, key role of the US, postindustrialism, the information revolution
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*Robbie Robertson, The Three Waves of Globalization. A History of a
Developing Global Consciousness. L.: Zed Books, 2003
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Globalization is much more than the growth of
global markets or power strategies pursued by
some forces which have a global reach
It is a process of development of the human
civilization leading to the rise of global society
“Anti-globalization” is a misnomer
Because these protesters are part of globalization
themselves
At issue is the struggle over the terms of
globalization, over the shape of the world order
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The Third Wave:
US-led efforts to create an international order
Politically: democracy, rule of law, peaceful
resolution of disputes (The United Nations)
Economically, a set of institutions to rebuild a
growing world economy in which mutual economic
interests would make wars less likely (the BrettonWoods System)
Late 1960s-early 1970: the notion of
interdependence of nations – growth of interests
and concerns shared on a global scale
“The global village”
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After the end of the Cold War,
globalization was presented as a progressive,
positive force binding humanity together, opening
up great opportunities for progress everywhere,
etc.
Peace, cooperation, and prosperity instead of war,
impoverishment, and radical revolutions
The real record is a far cry from this utopia
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Institutions of economic globalization
The IFIs – they make and maintain the rules
Parallel development: the rise of the TNCs, the
institutional core of the global market economy
Many states pursued socialist-type reforms
Success in saving and reviving capitalism
1950s-early 1970s: “The Golden Age”
Late 1970s:
the shift to the neoliberal model (The Washington
Consensus)
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Neoliberal economic reforms (“Structural
adjustment policies”, “Shock therapy”)
Implemented:
first in the less developed countries of the Global
South,
 then in post-communist states of Eastern Europe
and Eurasia,
 then in Western countries
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3 main components designed to reduce the role of
the state and free up market forces:
Liberalization
 Stabilization
 Privatization
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Average annual growth rate of world GDP:
 4.9 percent between 1950 and 1973
 3.0 percent between 1973 and 1992
 2.7 percent between 1990 and 2001
Average ratio of real interest rate to GDP growth rate
in the seven leading capitalist economies:
 0.97 between 1881 and 1913
 2.40 between 1919 and 1939
 0.36 between 1946 and 1958
 0.55 between 1959 and 1971
 0.47 between 1972 and 1984
 2.34 between 1985 and 1997
Percentage share of national income
Country
Poorest Poorest
10%
20%
Richest
20%
Richest
10%
Brazil
1.0
2.6
63.0
46.7
Russia
1.7
4.4
53.7
38.7
US
1.8
5.2
46.4
30.5
Canada
2.8
7.5
39.3
23.8
Germany
3.3
8.2
38.5
23.7
Human Development Report 2001, UN Development
Program
The world’s population: 3 classes
Upper class: 11% (real income higher than the average
income in Italy)
Middle class: 11% (real income between the average income
in Italy and the poverty line, adjusted for purchasing power)
The poor:
78% (real income below the poverty line)
See Branko Milanovic, True World Income Distribution, 1988 and 1993: First
Calculations Based on Household Surveys Alone. Economic Journal , Jan.2002
2.8 bln. people live on less than $2 a day
The richest 1% of the world’s people receive as much income
as the poorest 57% (UN Human Development Report 2002,
Overview, p.2)
World’s 3 richest people have assets greater than 48 poorest
countries combined
Inequality on a global scale
The gap in living standards between the richest and poorest
nations:
1820: 3 to 1
1913: 11 to 1
1950: 35 to 1
2002: 70 to 1
See Jeremy Seabrook, The No-Nonsense Guide to Class, Caste and
Hierarchies. Toronto: New Internationalist Publications, 2002, p.77
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Global trends in development:
HDR - Statistics - Get Data - Human development
in animation
UN Human Development Report 2002:
“Economically, politically and technologically, the
world has never seemed more free – or more
unjust” (p.1)
“Advancing human development requires
governance that is democratic both in form and in
substance”
UN Millennium Development Goals, adopted in 2000:
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1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria, and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development